SANTO DOMINGO- Total public deposits in the banking sector totaled RD$2 trillion 257,253 million as of July 2024, an amount that included an increase of RD$155.8 billion in the first seven months of the year, in absolute terms, and a percentage increase of 7.41% during the first seven months of the year, reported the Association of Multiple Banks of the Dominican Republic (ABA).
The ABA stated that the behavior of deposits was determined mainly by the increase in time deposits and demand deposits, which increased by RD$101.5 billion and RD$49.2 billion respectively, according to data from the Superintendency of Banks.
He argued that the behavior of public deposits during the period reflected confidence in multiple banks to safeguard and protect their resources, which are then channeled significantly into credit and investment operations, thus having a favorable impact on economic growth.
Similarly, he indicated that it demonstrates the banks' ability to attract and retain deposits, which is crucial for the liquidity and stability of the financial system.
The ABA explained that, despite the 7.41% growth in public deposits between January and July of this year, this was lower than the 12.20% recorded in the same period of the previous year. However, it considers this a normal fluctuation, given the multiplier effect resulting from the liquidity facilities provided by the Central Bank during 2023
Bank interest rates
The Banking Association reported that the weighted average active and passive rates of multiple banks stood at 15.3% and 10.3% respectively, as of July 2024, according to data provided by the Central Bank.
He noted that the active rate is the percentage that banks charge customers for the loans they grant, whether to individuals or companies, and the passive interest rate is the percentage that banks pay to depositors in savings accounts, fixed-term deposits, or other financial instruments that generate returns.
In this regard, the ABA expects that, as the Central Bank continues with the cycle of reductions in the Monetary Policy Rate initiated in its latest provision and other easing measures, there will consequently be a gradual decrease in the interest rates applied to loans and bank deposits.
